What Is Logistics?
Let me explain what logistics really means. It's the overall process of managing how you acquire, store, and transport resources to their final destination. As a logistics manager, you'd identify prospective distributors and suppliers, then determine their effectiveness and accessibility. We call these managers logisticians.
Originally, 'logistics' was a military term referring to how personnel obtained, stored, and moved equipment and supplies. Now, you'll see it used widely in business, especially in manufacturing, to describe how resources are handled and moved along the supply chain.
Key Takeaways
- Logistics is the overall process of managing how resources are acquired, stored, and transported to their final destination.
- Poor logistics in a business can impact its bottom line.
- Logistics is now used widely in the business sector, particularly by companies in the manufacturing sector, to refer to how resources are handled and moved along the supply chain.
Understanding Logistics in Management and Business
In simple terms, the goal of logistics management is to have the right amount of a resource or input at the right time, get it to the appropriate location in proper condition, and deliver it to the correct internal or external customer.
Take the natural gas industry as an example: logistics there involves managing pipelines, trucks, storage facilities, and distribution centers that handle oil as it's transformed along the supply chain. You need an efficient supply chain and effective logistical procedures to reduce costs and maintain or increase efficiency. If your logistics are poor, you'll face untimely deliveries, fail to meet client needs, and ultimately see your business suffer.
The concept of business logistics has changed since the 1960s. With the increasing complexity of supplying companies with materials and resources, plus the global expansion of supply chains, there's a real need for specialists called supply chain logisticians.
In today's world, the technology boom and the complexity of logistics processes have led to logistics management software and specialized firms that speed up the movement of resources along the supply chain.
Manufacturing companies might outsource their logistics management to specialists or handle it internally if it's cost-effective for them.
Note
One reason large online retailers like Amazon dominate the retail landscape is the innovation and efficiency of their logistics at every link in the supply chain.
Special Considerations
The tasks a logistician handles vary by business. Primary responsibilities include overseeing and managing inventory by arranging appropriate transportation and adequate storage.
A qualified logistician plans the logistics process and coordinates steps as inventory and resources move along the supply chain.
Specialized training in supply chain management and logistics often comes from core or elective courses, or even full programs, in business education. You'll usually need a business degree emphasizing these skills—or sometimes a technical degree in systems analysis or database management—to start a well-paid career as a logistician.
What Is Logistics in Business?
In business, logistics is the process of transporting and storing raw materials, finished goods, inventory, and other resources. It typically includes components like customer service, demand forecasting, warehousing, material handling, inventory control, order processing, and transportation.
Why Is Logistics Important?
Logistics is critical to a company's bottom line. It enables the movement of materials or goods, the satisfaction of contracts, and the fulfillment of services. Effective logistics management ensures smooth movement along the supply chain and can provide a competitive advantage.
What Jobs Are Available in the Logistics Industry?
Careers in logistics can include truck drivers, customer service representatives, dispatchers, freight agents, supply chain managers, transportation analysts, procurement managers, logisticians, and operations managers, among others. A degree in logistics or business administration will help for many roles, including logistician, which is expected to grow much faster than average.
The Bottom Line
When a company optimizes its logistics, it improves efficiency along all points of the supply chain. Understanding how to get the right resource to the right place at the right time can differentiate your business, adding value to the customer while cutting costs and boosting the bottom line.
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